Lap Loans

Are you looking to expand your business? Do you want to consolidate your higher-interest debts? Are you considering sending your children overseas for quality education? 

If you want to get funds to do all these, then you don’t have to worry. 

You can go ahead and apply for the loan against property (LAP) facility. It is a secured loan that needs you to put down collateral in the form of your property. 

You are provided with the funds as per the Loan to Value ratio of your property. Home mortgage loans attract lower interest rates as there is security involved. 

Based on your property’s worth and other eligibility factors, you can get higher funds. But before you apply for the LAP loan, you ought to remember a few vital factors. Let’s know about them!

  1. The evaluation of your property 

The loan against property is provided against collateral – the immovable property. Before checking out your eligibility and the amount of loan, the lender appraises your property. The loan amount that you can get will depend on the prevailing market value of your property and the future’s estimated value. Thus, you should know how much funds your property can give and know if it fulfils your needs. 

  1. Loan repayment 

The loan repayment of mortgage loan ranges from 2 to 20 years for salaried professionals. Most of the leading lenders also let you make prepayments towards the availed amount. If you want to do that, then you should ensure checking out the charges for it. This way, you will be aware of the amount that you will pay for prepayment and avoid being surprised. 

  1. Rate of interest 

Before opting for the loan against property, you should ensure to check out the applicable rate of interest. You should not commit to any creditor until you are done with an interest comparison and is convinced that it is a good deal. 

  1. Compare all lenders 

While looking to apply for the mortgage loan, you should ensure comparing all available offers on a third-party website. This way, you can help yourself pick the best offers matching your needs and repayment capacity. 

  1. Loan amount 

Applying for the home mortgage loan may not make any sense if you are unable to get the desired funds. It is because if you don’t, then you will need to come up with other arrangements of funds. Hence, before you apply for the LAP loan, always know an amount that you will get. This way, you may know if the availed amount may cover your needs or not. 

  1. Processing and other charges 

All loans attract some amount in the form of processing charges ranging 0.50% and 4%. You may have to pay some charges upfront while a few are deducted from your principal amount. You also need to manage to pay stamp duty charges as per states where you are taking the loan, the penalty for defaults, prepayments and foreclosure. You should be aware of these all in advance so that you have an idea of what to pay and when. 

  1. No tax benefits

If you want to enjoy some tax benefits unlike some other loans or payment of interest and principal, then the LAP loan does not have any such provision. Therefore, there can’t be any tax benefits that you can avail if you are applying for LAP in the future. 

  1. Check if you meet the eligibility terms of the lender

The eligibility terms of the LAP loan may vary from lenders to lenders. Therefore, you ought to be sure of all such factors. The eligibility for the loan is mentioned on the website of a lender. The standard eligibility terms include: 

  • You should be aged between 33 and 58 years.
  • You should be a resident citizen of India.     
  • A salaried employee with an MNC, Public or a Private company. 
  • Latest Salary slips.
  • Last 3 months’ bank account statement. 
  • Address proofs. 
  • PAN Card/Aadhaar Card. 
  • Copy of the property documents that you wish to be mortgaged. 
  • Income Tax Returns (ITRs). 

By sohaw